19)

If fixed costs are $274,000, the unit selling price is $124, and the unit variable costs are $79, the break-even sales (units) is

a.3,468 units

b.1,350 units

c.6,089 units

d.2,210 units

18)

Strait Co. manufactures office furniture. During the most productive month of the year, 3,400 desks were manufactured at a total cost of $83,000. In the month of lowest production, the company made 1,140 desks at a cost of $64,400. Using the high-low method of cost estimation, total fixed costs are

a.$55,018

b.$18,600

c.$64,400

d.$83,000

17)

Variable costs as a percentage of sales for Lemon Inc. are 78%, current sales are $577,000, and fixed costs are $180,000. How much will operating income change if sales increase by $49,600?

a.$10,912 increase

b.$38,688 increase

c.$10,912 decrease

d.$38,688 decrease

Gunes Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were:

A total of 8,500 units were started and 7,400 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs.

The total cost transferred from the first processing department to the next processing department during the month is closest to: (Do not round intermediate calculations.)

Multiple Choice

• $476,929

• $525,000

• $599,376

• $501,600

Assume you are the CFO of AIFS. Your analyst reports the following information (Use the following information for the remainder of the assignment):

• Current exchange rate is $1.16/€.

• Forward rate is $1.185/€.

• Expected final sales volume is 30,000. Worst case scenario is volume of 10,000. Best case scenario is volume of 36,000

. • Cost per student is €2500.

• Option premium is 2% of USD strike price.

• Option strike price is $1.165/€.

As the CFO, you decided to hedge using option contracts. Assuming expected final sales volume is 30,000, what are your total benefit/cost and the percentage benefit/cost from hedging (compared to no hedging)

No hedging at $1.16/€= $87,000,000

No hedging at $1.25/€= $93,750,000

No hedging at $1.08/€= $81,000,000

**Show full working solutions**

a) if the exchange rate remains at $1.16/€?

b) if the exchange rate will be $1.25/€?

c) if the exchange rate will be $1.08/€?

Investors are considering funding of new video games. How many people must be surveyed in order to be 95% confident that the estimated percentage is within 4% points of the true population percentage? A.) Assume nothing is known about percentage of people who play video game. B.) Assume that 16% of people play video game.

Business Class

21. Tsymbal owns a parcel of real estate unencumbered by any liens (“free and clear”). She can be said to own the real estate:

a. conditionally;

b. subject to a life estate;

c. in fee simple absolute;

d. pursuant to a bailment contract.

22. Washington is a community property state.

T / F

23. In this type of deed, the seller not only conveys ownership in a parcel of real estate, but the owner also guarantees good title to the buyer.

a. a quit claim deed;

b. a sheriff’s deed;

c. a deed in trust;

d. a warranty deed.

24. This power allows the government to condemn private property and commit it to public use, after duly compensating the owner.

a, the power of fee simple absolute;

b. zoning;

c. eminent domain.

d. force majeure.

25. While she is attending a movie, McCulloch visits the restroom. While in the restroom, she removes her wristwatch and leaves it on the sink. Hasso finds the watch. The legal owner of the watch is:

a. McCulloch;

b. Hasso;

c. the owner of the theater;

d. the state of Washington.

You are given the sample mean and the population standard deviation. Use this information to construct the​ 90% and​ 95% confidence intervals for the population mean. Interpret the results and compare the widths of the confidence intervals. If​ convenient, use technology to construct the confidence intervals. A random sample of 6060 home theater systems has a mean price of ​$135.00135.00. Assume the population standard deviation is ​$15.8015.80. Construct a​ 90% confidence interval for the population mean.

The​ 90% confidence interval is ​(_,_​). ​(Round to two decimal places as​ needed.)

Construct a​ 95% confidence interval for the population mean. The​ 95% confidence interval is ​(_,_). ​(Round to two decimal places as​ needed.) Interpret the results.

Choose the correct answer below.

A. With​ 90% confidence, it can be said that the population mean price lies in the first interval. With​ 95% confidence, it can be said that the population mean price lies in the second interval. The​ 95% confidence interval is wider than the​ 90%.

B. With​ 90% confidence, it can be said that the population mean price lies in the first interval. With​ 95% confidence, it can be said that the population mean price

Question 4 [20 marks] Analyze if the statements that are presented below are True or False. You MUST justify your answer to get credit. Answers without justification (even if they are correct) will be given zero marks.

(a) In any Pareto-optimal allocation of a two-good economy, each consumer has to consume a positive amount of both goods.

(b) A monopolist never produces on the elastic segment of its average revenue curve.

(c) If a firm’s production exhibits increasing returns to scale, then the firm’s marginal costs are decreasing and below its average costs.

(d) Maroon Theater practices third-degree price discrimination and sells tickets to three groups of customers: students, regular customers and senior citizens. The inverse demand of the three groups is linear. Furthermore, the students’ and senior citizens’ elasticities of demand for tickets are −4 and −3, respectively. Because the price charged to regular customers is greater than the price charged to senior citizens, we know with certainty that the ticket price for students will be lower than the ticket price for regular customers.

Use the six-step hypothesis testing where appropriate:

1. You have been told that the mean price of two movie tickets including online service charges, a large popcorn, and two medium soft drinks is $38. Based on a sample of 10 theater chains and assuming a normal distribution, the sample mean was found to be $36.53 and the standard deviation was $3.38. At the 0.05 level of significance, is there enough evidence to indicate that the average price is now less than $38?

a. What is the appropriate null and alternative hypothesis for problem 1? Use both words and notations

b.What level of significance and sample size is used in this problem?

c.What type of problem is this? What formula will you use? Why?

d. What is the correct critical value for the problem? How did you find it?

e.What is the correct value for the test statistic? Provide the formula used and show work

f. Should you accept or reject the null hypothesis? How much confidence do you have in your decision? Restate the null of alternative hypothesis. What policy decision would you make?

Can you use Twitter activity to forecast box office receipts on the opening weekend? The following data (stored in TwitterMovies indicate the Twitter activity (“want to see” and the receipts ($) per theater on the weekend a movie opened for seven movies. Solve this problem to two significant digits.

1. What is the independent variable (X) in this question?
2. What is the dependent variable (Y) in this question?
3. Create a scatter plot of the X and Y variables.
4. What is the Y intercept when X = 0?
5. What is the slope?
6. What is the correlation between the X and Y variables as measured by the R Square? How strong is this correlation?
7. Predict the mean receipts for a movie that has a Twitter activity of 100,000.
8. Should you use the model to predict the receipts for a movie that has a Twitter activity of 1,000,000? Why or why not?
   

36-40

The cost of merchandise sold reported on the income statement was $770,000. The A/P balance decreased $44,000, and the inventory balance decreased by $66,000 over the year. What is the amount of cash paid for merchandise?

A coal company invests $16 million in a mine estimated to have 20 million tons of coal and no salvage value. It is expected that the mine will be in operation for 5 years. In the first year, 1,000,000 tons of coal are extracted and sold. What is the depletion expense for the first year?

A company purchased land for $90,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the cost principle, the cost of land would be recorded at

The indirect method of reporting cash flows from operating activities uses the logic that a change in any balance sheet account can be analyzed in terms of changes in the other balance sheet accounts.

True

False

If you asked your broker to purchase for you a 12% bond when the market interest rate for such bonds was 11%, you would expect to pay less than the face amount for the bond.

True

False